Home prices roll backward

San Diego County home prices fell last month, erasing all of the gains achieved in the second half of 2009, MDA DataQuick reported yesterday. But analysts said the figures represented a statistical and seasonal fluke, and predicted the market is likely to see little fluctuation in values all year.

The overall median fell $25,000 or 7.6 percent, to $305,000, the single biggest month-to-month decline in 22 years of record-keeping and half the gain registered in the past 12 months. It stands about where it was in the spring.

But it was still $25,000 higher than in January 2009, when the median was $280,000, the lowest since prices began falling in late 2005.

Sales last month were down 36.4 percent to 2,322, a typical pullback from year-end closings in December, and off 5.6 percent from year-ago levels.

With most buyers taking a breather from buying over the holidays, the closings in January reflected continued interest by investors, hoping to purchase foreclosed properties at below-market levels, often with all-cash offers. The percentage of resales that had been foreclosed on in the previous 12 months rose to 38.2 percent, the highest since June. Last year, investor interest peaked in January at a record 55 percent.

Market watchers said the median could keep falling and test the $280,000 level, but it also could rise above December’s post-slump peak of $330,000.

The unknown factor is the pace of foreclosures. As foreclosures waned in 2009, the median rose. But analysts said that even if foreclosures grow again, the median could still rise, if more high-priced homes are among the distressed properties.

Other unknowns include the general economy and unemployment; interest rates; and federal government policy that until now has propped up the housing market through tax incentives and financial support for lenders.

DataQuick analyst Andrew LePage refused to predict what will happen in light of so many variables.

“It doesn’t take much to move the median around with the market skewed toward a lot of foreclosures and (low-cost) inland sales,” LePage said. “We’re still not seeing a normal buying and selling pattern. … For the most part, you’re looking at prices flattening out. You’re looking for other statistical reasons for that median to bounce around.”

He and others said the most likely picture for the typical homeowner is that values will remain unchanged, even as the median wobbles with changes in the market mix from month to month.

DataQuick President John Walsh said January and February are notoriously unreliable in determining how the year’s housing market develops.

“We try not to overanalyze one month’s data,” Walsh said.

So the advice to consumers: Pay no attention to January and February, the year’s most volatile months. Wait for signs of the future in the spring.

Other indicators in January included continued low use of jumbo-loans to buy high-cost properties; greater reliance on mortgages insured by the Federal Housing Administration; slightly more “flipping” of homes, or sales closed between three weeks and six months after a previous sale; and a slightly lower mortgage payment for all homes regionwide, $1,170 in January, down from $1,231 in December.

Although the county’s median price dipped, what that amount will buy varies dramatically.

For example, a single-family resale house in Normal Heights was listed yesterday at the median $345,000 for that category. It was for a fixed-up, 576-square-foot cottage, said Loraine Brown, the agent for the owner. Angie Krahner, 43, an electrical engineer, had bought the home in 2000 for $185,000 and invested about $25,000 in improvements.

For the same $345,000, a buyer could get a 1,536-square-foot home in Clairemont, but it needs up to $80,000 in work in the wake of a trashing by tenants who were evicted last month, said Mike Casciola, ﻿the broker-owner at SoCal Properties, the listing agent.

Mark Marquez, president of the San Diego Association of Realtors, said the market now is skewed by a lack of inventory. He cited the many short-sales awaiting approval by banks for a sale at less than the outstanding mortgage balance; untold numbers of homes that have been foreclosed on but are not listed; homes awaiting loan modification; and homes held by owners who do not want to sell because they hope prices will rise.

As of yesterday, the association said there were 13,253 active listings and pending sales, compared with 15,108 at this time last year.

Ben Evers at Century 21 Award said he thought the “excitement” had gone out of the market, at least for the moment. He cited the confusion surrounding the $8,000 federal first-time homebuyer tax credit that was extended last fall and investor interest that he thinks has cooled in recent weeks.

But he did not express concern that the January price drop represents a return to declining medians for the year.

“I expect to see continuing improvement,” Evers said. “I don’t think $305,000 is the ceiling (on the median) — I wouldn’t think that for a minute. … What I’m looking for, and what a lot of homebuyers and sellers are looking for, is a return to a market with normal pressures on it and not the artificial pressures.”

DataQuick’s LePage said he would not predict that 2010 will repeat 2009’s price rises or 2008’s decline.

“This is an abnormal market,” LePage said.

But just because the economy is in better shape than 12 months ago, he cautioned, it is not inevitable that things will turn upward — given that a “jobless recovery” is likely and that the federal government is likely to back off the heavy subsidies and incentives.

But for most homeowners, he predicted relatively flat changes in valuations.

“There will always be exceptions, but for most of the market, it is unlikely prices would move much this year,” he said.